Kissing Camels Surgery Ctr., LLC v. Centura Health Corp.
Kissing Camels Surgery Ctr., LLC v. Centura Health Corp.
2016 WL 11785647 (D. Colo. 2016)
June 2, 2016

Wang, Nina Y.,  United States Magistrate Judge

Sampling
Redaction
Failure to Produce
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Summary
The court ordered the production of unredacted copies of settlement agreements between Plaintiffs and HCA or Kaiser, as well as the initial production of every fourth file of documents associated with the processing of Aetna claims by Plaintiffs. All ESI was deemed relevant and important for the court to consider in making a decision.
Additional Decisions
KISSING CAMELS SURGERY CENTER, LLC, CHERRY CREEK SURGERY CENTER, LLC, ARAPAHOE SURGERY CENTER, LLC, and HAMPDEN SURGERY CENTER, LLC, Plaintiffs,
v.
CENTURA HEALTH CORPORATION, COLORADO AMBULATORY SURGERY CENTER ASSOCIATION, INC., ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE, INC., d/b/a ANTHEM BLUE CROSS AND BLUE SHIELD OF COLORADO, UNITED HEALTHCARE OF COLORADO, INC., and AETNA, INC., Defendants
Civil Action No. 12-cv-03012-WJM-NYW
United States District Court, D. Colorado
Filed June 02, 2016
Wang, Nina Y., United States Magistrate Judge

ORDER ON DISCOVERY ISSUES

*1 This matter comes before the court on two discovery disputes identified in the Parties’ Joint Status Report filed on May 31, 2016 [#429]: (1) whether Defendants may obtain settlement agreements entered into between Plaintiffs and former defendants to this action, and other discovery related to the negotiation of such agreements; and (2) whether Defendant Aetna, Inc. (“Aetna”) may obtain all files associated with the processing of Aetna claims by Plaintiffs. This court has reviewed the Joint Status Report and the applicable case law; entertained attorney argument, and reviewed the Supplemental Authority filed by Plaintiffs after the Status Conference on June 1, 2016. [#431].
 
BACKGROUND
In their Joint Status Report filed on May 31, 2016, Plaintiffs objected to the production of settlement agreements reached in this litigation with other defendants as well as any discovery regarding communications concerning those settlements. [#429 at 4-5]. Defendants contend that the settlement agreements and communications regarding those settlements are relevant to their claim for damages as well as understanding the scope of the terms to which the Parties agreed. [Id. at 14-15]. In addition, Aetna has requested that Plaintiffs produce their file of documents maintained for each claim that is submitted to an insurer requesting reimbursement. [Id. at 15]. Plaintiffs do not object to producing a sample set of such documents, and have produced data that reflect the amount collected for each claim, but contend that the production of all 3800 files is overly burdensome.
 
ANALYSIS
This case was originally initiated by Plaintiffs Kissing Camels Surgery Center, LLC (“Kissing Camels”), Cherry Creek Surgery Center, LLC (“Cherry Creek”), Arapahoe Surgery Center, LLC (“Arapahoe”), and Hampden Surgery Center, LLC (“Hampden”) (collectively, “Plaintiffs”) against defendants HCA, Inc., HCA-HealthOne LLC (together with HCA, Inc., “HealthOne”), Centura Health Corporation (“Centura”), Colorado Ambulatory Surgery Association, Inc. (“CASCA”), and Kaiser Foundation Health Plan of Colorado (“Kaiser”), and asserted ten counts: (1) a violation of § 1 of the Sherman Antitrust Act; (2) conspiracy to monopolize in violation of § 2 of Sherman Antitrust Act on behalf of Arapahoe, Cherry Creek, and Hampden against Health One and Centura; (3) attempted monopolization in violation of § 2 of Sherman Antitrust Act on behalf of Arapahoe, Cherry Creek, and Hampden against Health One and Centura; (4) conspiracy to monopolize in violation of § 2 of Sherman Antitrust Act on behalf of Kissing Camels against Centura; (5) attempted monopolization in violation of § 2 of Sherman Antitrust Act on behalf of Kissing Camels against Centura; (6) a violation of the Colorado Antitrust Act; (7) conspiracy to monopolize in violation of Colo. Rev. Stat. § 6-4-105 on behalf of Arapahoe, Cherry Creek, and Hampden against HealthOne and Centura; (8) attempted monopolization in violation of Colo. Rev. Stat. § 6-4-105 on behalf of Arapahoe, Cherry Creek, and Hampden against Health One and Centura; (9) conspiracy to monopolize in violation of Colo. Rev. Stat. § 6-4-105 on behalf of Kissing Camels against Centura; and (10) attempted monopolization in violation of Colo. Rev. Stat. § 6-4-105 on behalf of Kissing Camels against Centura. In that First Amended Complaint filed on April 3, 2013, Plaintiffs added Rocky Mountain Hospital and Medical Service, Inc., d/b/a Anthem Blue Cross and Blue Shield of Colorado (“Anthem”), United Healthcare of Colorado, Inc. (“United”), Audubon Ambulatory Surgery Center, LLC (“Audubon”) and Aetna as Defendants. [#70]. At the core of their allegations, Plaintiffs contend that Defendants conspired to preclude Plaintiffs from participating in their insurance networks. See, e.g., [#1 at ¶ 53]. During the course of this litigation, Plaintiffs have settled with certain Defendants, including HCA, Inc., HCA-HealthOne LLC (together with HCA, Inc., “HealthOne”) and Kaiser Foundation Health Plan of Colorado (“Kaiser”).
 
I. Settlement Documentation
*2 Rule 408 of the Federal Rules of Evidence does not preclude discovery of information and documents related to Plaintiffs’ settlement of this action with HCA and Kaiser, and the information regarding settlement or gleaned from settlement documents may be introduced for certain purposes at trial. Plaintiffs argue that they should not be required to produce either the executed settlement agreements or provide any information with respect to the negotiation of such agreements because the agreements were confidential and Defendants have failed to establish their relevance. Plaintiffs also ask this court to consider the executed settlement agreements separately from the documents regarding the negotiation as distinct categories.
 
Settlement Agreements. Plaintiffs assert that all of the named Defendants were part of a conspiracy to preclude Plaintiffs from the relevant market, that certain Defendants refused to extend their provider networks to include Plaintiffs, and that certain Defendants terminated physicians who utilized Plaintiffs’ centers. [#70]. Plaintiffs also assert that they have been economically injured by Defendants’ actions. [Id.]. As this court indicated during the Status Conference, it is persuaded that Defendants’ requests for production directed at settlement agreements executed to resolve this action between Plaintiffs and HCA or Kaiser are relevant and proportional to the issues presented in this case, including but not limited to damages. In addition, this court is not persuaded that any terms should be redacted; Plaintiffs present no unique issue indicating that the Protective Order is insufficient or that the executed settlement agreements would reflect litigation strategy to Plaintiffs’ prejudice. This court is not, however, persuaded that any additional information that could be gained from discovery of the settlement negotiations outweighs the potential chilling effect upon parties engaging in full and frank discussions in pursuit of compromise.
 
Accordingly, this court ORDERS production of the unredacted copies of the settlement agreements between Plaintiffs and HCA or Kaiser no later than June 3, 2016. No further discovery on the issues surrounding the settlement agreements will be permitted without a specific, articulated basis.
 

II. Aetna Claim Files
There is no real dispute between Plaintiffs and Aetna that the claim files sought are relevant; the issue is focused upon whether production of such files is burdensome. Plaintiffs seek to provide a “sampling,” while Aetna seeks every file. Aetna intends to use the information gathered to establish that the Plaintiffs charged members one price for their services and then sought reimbursement from Aetna for those services at a much higher price [#429 at 16]. Weighing the remaining time for discovery and the limited information provided to this court as to how the samples would be selected and whether the sample size would be acceptable to be statistically relevant so that Aetna could extrapolate the results, and the fact that Plaintiffs do not provide the court with any specifics as to the burden of the production which is electronically available [#429 at 9-10], this court finds that the initial production of every fourth file no later than June 9, 2016 is appropriate. To the extent that additional information is needed after that initial production, the Parties should contact the court for an informal discovery conference.